Lease, Licence Or Tenancy At Will?

• Published date: 27 June 2023
• Subject Matter: Real Estate and Construction, Landlord & Tenant - Leases
• Law Firm: Myerson Solicitors LLP
• Author: Myerson Solicitors LLP

We often get enquiries from property owners who are trying to decide how to document the short-term occupation of their business premises.

In this blog, we consider the advantages and disadvantages of using a lease, licence, and tenancy at will for the occupation of commercial property on a short-term basis.

Lease

A lease is an agreement that grants exclusive possession of the premises to the tenant for a fixed period and is an estate in land.

Even if the parties have intended to grant a licence or tenancy at will and have labelled the document as such, a lease may still be created if the tenant has exclusive possession of the premises.

Exclusive possession means possession of the premises to the exclusion of all others, including the landlord (although the lease will usually reserve rights of entry for the landlord to inspect and repair the premises where necessary).

The advantages of a lease for a property owner are that the landlord will be guaranteed a certain rental income during the term of the lease and, provided that the lease is contracted out of the security of tenure provisions conferred by the Landlord & Tenant Act 1954, the landlord will be entitled to possession of the premises on expiry of the contractual...